Sabana REIT falls to 52-week low on news of rights issue

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Against the backdrop of its announcement to issue 310 million new units, and a decision to adjust the prices of convertible securities, units of Sabana REIT has fallen to its lowest in 52 weeks on the Singapore Exchange.

According to official closing numbers from the bourse, units of the Singapore-listed industrial REIT finished the trading day on 27 December 15.56% lower from its previous session to end at SGD0.38.

Sabana REIT first announced on 20 December that it will be issuing 310,712,244 new units via a 42-for-100 rights issue to raise some SGD80.2 million (USD55.3 million).

Each rights issue has been priced at SGD0.258, while books closure for eligibility of rights units has been set for 29 December at 1700 hours.

Proceeds from the exercise will be primarily deployed to fund the acquisition of three light industrial properties in Singapore.

The REIT also then announced on 24 December that it will be adjusting the price of SGD80 million worth of 4.5% convertible sukuk (Shari’ah-compliant securities that are similar to bonds) due in 2017 from SGD1.0131 to SGD0.8628.

The adjustment will be effective on the date of issue of the rights units, which has currently been set for 25 January 2017.

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Ridzwan Rahmat has been analysing Singapore-listed REITs and business trusts, since 2008. For disclosure purposes, Ridzwan is currently vested in Mapletree Greater China Commercial Trust, Mapletree Industrial REIT and Mapletree Logistics Trust.

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